Health savings account system

ABSTRACT

A method of providing insurance (including professional malpractice liability insurance) to consumers against unfavorable outcomes resulting from services, methods of rating risks associated with services, and a method of reducing the risk of unfavorable outcomes. In the first preferred embodiment, a policy limit is chosen by a patient (or other consumer), a premium based on the policy limit is paid by the patient, and if malpractice is committed by a health care provider (or other professional), the consumer is compensated up to the amount of the policy limit. The consumer signs an agreement that the liability of the service provider for malpractice will not exceed the policy limit. Risk factors are evaluated for the consumer, the doctor, hospital or other service provider, and the procedures that are to be performed, and are used to determine the amount of the premium, taking into account the policy limit chosen by the consumer.

CROSS REFERENCE TO RELATED APPLICATIONS

This application is a Continuation-In-Part of Utility patent applicationSer. No. 10/249,270, filed Mar. 27, 2003, and a Continuation-In-Part ofUtility patent application Ser. No. 11/775,232, filed Jul. 10, 2007(which was itself a Continuation-In-Part of Utility patent applicationSer. No. 10/882,262, filed Jul. 2, 2004, now abandoned, and of theaforementioned Utility patent application Ser. No. 10/249,270, filedMar. 27, 2003) all of which are incorporated herein by reference.

BACKGROUND OF THE INVENTION

1. Field of the Invention

The present invention relates to insurance (including professionalmalpractice liability insurance) to consumers against unfavorableoutcomes resulting from services, methods of rating risks associatedwith the services, methods of reducing the risk of unfavorable outcomes,and automated systems for setting up and using health savings accounts.

2. Description of the Prior Art

The United States of America is currently facing a crisis relating toliability for medical malpractice and insurance for it. It is difficultor impossible for many physicians to pay the premiums required foradequate professional liability coverage. However, the “caps” onliability for punitive damages, that have already been enacted in somestates, and are proposed in other states and at the federal level inCongress, are likely to deprive victims of adequate compensation. E.g.,a young person, who is severely injured as a result of medicalmalpractice, may not be able to hold a normal job, and thus may beimpoverished under the proposed caps, because the maximum compensationallowed under the proposed reforms may be grossly inadequate tocompensate for a young person's pain and suffering over a lifetime.There have been a number of prior patents relating to professionalmalpractice and methods for reducing the cost of insurance.

U.S. Pat. No. 5,752,237, issued on May 12, 1998, to Julius Cherny,discloses a method and apparatus for providing professional liabilitycoverage to professionals such as lawyers and accountants having largenumbers of publicly traded corporate clients. It would allow theprofessionals or their insurance companies to sell short the stock ofcorporations when the price of their stock goes down due to professionalmalpractice. This would reduce the premiums paid by the insuredprofessionals and/or increase the profits of the insurance companies.

U.S. Pat. No. 5,845,254, issued on Dec. 1, 1998, to Edward J. Lockwood,Jeffrey Tarrant and Michael Volpe, discloses a method and apparatus forobjectively monitoring and assessing the performance of health-careproviders based on the severity of sickness episodes treated by theproviders. The rating method of the present invention isdistinguishable, in that it uses other factors besides the severity ofsickness episodes to rate health-care providers.

U.S. Pat. No. 5,852,808, issued on Dec. 22, 1998, to Julius Cherny,discloses the same method and apparatus for providing professionalliability coverage as the previous patent, but has different claims.

U.S. Pat. No. 5,999,909, issued on Dec. 7, 1999, to Amitabha Rakshit andWilson A. Judd, discloses a method for establishing certifiable patientinformed consent for a medical procedure. Like the present invention, ituses software to reduce medical malpractice costs.

U.S. Pat. No. 6,128,620, issued on Oct. 3, 2000, to Patricia L. Pissanosand Stephen M. Beasley, discloses a database for compiling informationfor medical malpractice litigation.

U.S. Pat. No. 6,223,164, issued on Apr. 24, 2001, to Jerry G. Seare etal., discloses a method and system for generating statistically-basedmedical provider utilization profiles. The profiles can then be used forcomparison of a medical provider to a normative profile. The ratingmethod of the present invention is distinguishable, in that it usesother factors to determine the risk of an unfavorable outcome.

U.S. Pat. No. 6,272,471, issued on Aug. 7, 2001, to Jeffrey J. Segal,discloses a method and apparatus for deterring frivolous professionalliability claims, by paying the legal costs of countersuits for improperprosecution when a frivolous claim has been made.

U.S. Pat. No. 6,317,719, issued on Nov. 13, 2001, to Robert W. Schrieret al., discloses systems and methods for providing patient-specificdrug information, designed for use by doctors. The information system ofthe present invention is distinguishable, in that it providesinformation directly to patients.

U.S. Pat. No. 6,394,811, issued on May 28, 2002, to Terese Finitzo andKenneth D. Pool, Jr., discloses computer-automated implementation ofuser-definable decision rules for medical diagnostic or screeninginterpretations. The information system of the present invention isdistinguishable, in that it provides information directly to patients,and is not designed as a substitute for the doctor's judgment.

U.S. Patent Application Publication No. 2002/0029157, published on Mar.7, 2002, to J. Alexander Marchosky, discloses a patient-controlledautomated medical record, diagnosis, and treatment system and method.The information system of the present invention is distinguishable, inthat it provides information to doctors and other providers, as well aspatients, and it is related to insurance against malpractice and otherunfavorable outcomes.

U.S. Patent Application Publication No. 2002/0082876, published on Jun.27, 2002, by David A. Martin and David R. Montgomery, discloses aprocess for linking credentialing information with a medical malpracticeinsurance application. U.S. Patent Application Publication No.2002/0087354, published on Jul. 4, 2002, by David A. Martin and David R.Montgomery, discloses the same process, with additional claims. Neitherdisclose the method of rating service providers of the presentinvention.

U.S. Patent Application Publication No. 2002/0194033, published on Dec.19, 2002, by David S. Huff, discloses a method and system forautomatically extracting data and generating insurance quotes, includingthe preparation and use of risk information profiles on clients. Thepresent invention is distinguishable, in that it also includes thepreparation and use of risk factors for service providers.

U.S. Patent Application Publication No. 2003/0009395, published on Jan.9, 2003, by James Weidner, David Preimesberger and A. Peter Kezirian,Jr., discloses property/casualty insurance entities and techniques,which remove unlimited liability and cap annual assessments, whileretaining the lower cost achievable by a claims-paid policy.

U.S. Patent Application Publication No. 2003/0028406, published on Feb.6, 2003, by Frederick S. M. Herz and Walter Paul Labys, discloses adatabase for screening potentially litigious patients.

U.S. Patent Application Publication No. 2004/0267579, published on Dec.30, 2004, by Barry S. Markman, discloses a method, apparatus and systemfor providing insurance coverage and claims payment for single eventsurgical and diagnostic procedures, but does not disclose the method ofrating hospitals and other service providers of the present invention.

Japanese Patent No. 57-34265, published on Feb. 24, 1982, inventorYoshikuni Tazawa et al., discloses a medical business system related toinsurance.

Japanese Patent No. 2002-132955, published on May 10, 2002, inventorTakayuki Saito, discloses a system for reducing and preventing medicalmalpractice.

Norm Andrzejewski and Rosalinda T. Lagua, Use of a Customer SatisfactionSurvey by Health Care Regulators: A Tool for Total Quality Management,1997 U.S. Department of Health and Human Services; Public HealthReports, Public Health Report 1997; vol. 112, pp. 206-210, May-June1997, discloses the use of a survey to determine quality of service, butdoes not disclose the method of rating hospitals and other serviceproviders of the present invention.

Patrick et al., Are Hospital Characteristics Associated with ParentalViews of Pediatric Inpatient Care Quality?, American Academy ofPediatrics, Pediatrics, vol. 111, pp. 308-14, February 2003, disclosesthe use of hospital characteristics to access quality, but does notdisclose the method of rating hospitals and other service providers ofthe present invention.

None of the above inventions and patents, taken either singly or incombination, is seen to describe the present invention as claimed.

SUMMARY OF THE INVENTION

The present invention is a method and system of providing insurance(including professional malpractice liability insurance) to consumersagainst unfavorable outcomes resulting from services, methods of ratingrisks associated with the services based on objective factors, a methodof reducing the risk of unfavorable outcomes, and a method and system ofproviding insurance, including medical health insurance, on anindividual-cost-specific basis, rather than a group-cost-specific basis.The first preferred embodiment is a method and system of providingprofessional liability insurance, with premiums pre-paid by consumers. Apolicy limit is chosen by a patient (or other consumer), a premium basedon the policy limit is paid by the patient, and if malpractice iscommitted by a health care provider (or other professional), the patientis compensated up to the amount of the policy limit. The patient signsan agreement that the liability of the health care provider formalpractice will not exceed the policy limit. Only then are medicalservices provided. Risk factors are developed and evaluated for thepatient, the doctor, hospital or other health care provider, and theprocedures that are to be performed, and are used to determine theamount of the premium, taking into account the policy limit chosen bythe patient. The total cost of the premium for insurance with insurancewith a given policy limit will be a function of the probability of anunsuccessful diagnosis and/or procedure for a given patient, hospitaland/or doctor times the cost associated with the result on non-success.

The second preferred embodiment is the same as the first preferredembodiment, except that what is insured against is not only malpractice,but compensation is provided to the consumer for any unfavorable outcomeof the services. The third preferred embodiment is the same as the firstpreferred embodiment, except that the premium is paid by the doctor orother service provider. The fourth preferred embodiment is the same asthe second preferred embodiment, except that the premium is paid by athird party. The fifth preferred embodiment is the system of ratingrisks by itself, and the data bases that are created and maintained inthe system, which may be used independently of the insurance system.

The sixth preferred embodiment is a method of rating hospitals for theirrisk of medical malpractice liability. The seventh preferred embodimentis a method of reducing the risk of malpractice or other unfavorableoutcomes. The eighth preferred embodiment is a method of rating aservice provider for risk of malpractice or other unfavorable outcomes.

The ninth preferred embodiment is an alternative method of providingmedical malpractice insurance, which is an adaptation and modificationof the first preferred embodiment. The tenth preferred embodiment is amethod of drug cost analysis. The eleventh preferred embodiment is amethod of providing health care insurance on an individual basis ratherthan a group basis.

The medical malpractice insurance that is included within the scope ofthe present invention is like the prior art flight insurance that aconsumer bought before getting on an airplane, in that if he (or she)does not buy the insurance the consumer does not get on the flight orsee the doctor. It differs in that the provider (i.e., airline ordoctor) could pay for the policy. The insurance company and/or anyoneelse could also pay for the policy, but the beneficiary must be theconsumer (i.e., the patient or but the beneficiary must be the consumer(i.e., the patient or passenger).

Accordingly, it is a first object of the invention to provide a solutionto the medical malpractice insurance crisis.

It is a second object of the invention to provide an alternative systemfor providing medical malpractice insurance, that insures adequatecompensation to injured patients, but will not bankrupt doctors or theirinsurance carriers.

It is a third object of the invention to provide a system of malpracticeinsurance that gives freedom of choice to consumers.

A fourth object of the invention is to provide a system of malpracticeinsurance that may be adapted to any profession needing professionalliability insurance.

A fifth object of the invention is to provide a system of insuringconsumers against unfavorable outcomes resulting from services.

A sixth object of the invention is to provide systems for rating risksbased on objective factors, that is event specific, in that the riskrating is determined at the point of contact for a particular event.

A seventh object of the invention is to provide a method for reducingthe risk of malpractice and other unfavorable outcomes.

An eighth object of the invention is to provide an individual ratherthan group based concept for malpractice insurance.

A ninth object of the invention is to provide a system that enablespatients to be proactive rather than merely reactive in the medicalmalpractice process.

A tenth object of the invention is to provide cost coverage that isindividual and event specific, rather than group specific with noconsideration of the individual.

An eleventh object of the invention is to provide a system ofcompensation in which the amount received is point and event specific.

A twelfth object of the invention is to provide a system of compensationthat reduces the need for litigation.

A thirteenth object of the invention is to provide a system ofcompensation that enables both consumers and service providers to beproactive rather than merely reactive.

A fourteenth object of the invention is to provide a system ofcompensation that educates patients, by providing them with informationabout what they are being treated for and how they are being treated.

These and other objects of the present invention will become readilyapparent upon further review of the following specification anddrawings.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a schematic view of the secure virtual private network thatmay be used to implement the first preferred embodiment of theinvention.

FIG. 2 is a flowchart of the initial steps in the first preferredembodiment of the invention.

FIG. 3 is a flowchart of intermediate steps in the first preferredembodiment of the invention.

FIG. 4 is a flowchart of the final steps in the first preferredembodiment of the invention.

FIG. 5 is a flowchart summarizing the steps taken in the first preferredembodiment when a patient is admitted to a hospital.

FIG. 6 is a flowchart summarizing the steps taken in patient interactionwith the system of the first preferred embodiment of the invention.

FIG. 7 is a flowchart summarizing the steps taken in doctor-patientinteraction in the first preferred embodiment of the invention.

FIG. 8 is a flowchart summarizing the steps relating to a wrist bandwhen a patient is admitted to a hospital in the first preferredembodiment of the invention.

FIG. 9 is a flowchart summarizing the steps relating to a wrist band fora walk-in patient at a hospital in the first preferred embodiment of theinvention.

FIG. 10 is a flowchart summarizing the steps taken in the secondpreferred embodiment of the invention.

FIG. 11 is a flowchart summarizing the steps taken in the sixthpreferred embodiment of the invention.

FIG. 12 is a flowchart summarizing the steps taken in the seventhpreferred embodiment of the invention.

FIG. 13 is a flowchart summarizing the steps taken in the eighthpreferred embodiment of the invention.

FIG. 14 is a flowchart summarizing a first series of steps taken in theninth preferred embodiment of the invention when a new patient entersthe system.

FIG. 15 is a flowchart summarizing a second series of steps taken in theninth preferred embodiment of the invention when a new patient entersthe system.

FIG. 16 is a flowchart summarizing a third series of steps taken in theninth preferred embodiment of the invention when a new patient entersthe system.

FIG. 17 is a flowchart summarizing a fourth series of steps taken in theninth preferred embodiment of the invention when a new patient entersthe system.

FIG. 18 is a flowchart summarizing the initial steps taken in the ninthpreferred embodiment of the invention when an old patient reenters thesystem.

FIG. 19 is a flowchart summarizing the concluding steps taken in theninth preferred embodiment of the invention when an old patient reentersthe system.

FIG. 20 is a flowchart summarizing the initial steps taken in the tenthpreferred embodiment of the invention.

FIG. 21 is a flowchart summarizing further steps taken in the tenthpreferred embodiment of the invention.

FIG. 22 is a flowchart summarizing concluding steps taken in the tenthpreferred embodiment of the invention.

FIG. 23 is a flowchart summarizing the steps taken in the twelfthpreferred embodiment of the invention.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS

The present invention is a method for providing insurance to consumersagainst unfavorable outcomes resulting from services, methods of ratingrisks associated with the services based on objective factors, and amethod of reducing the risk of unfavorable outcomes.

The first preferred embodiment of the invention is a system forproviding professional malpractice liability insurance, in which thepremiums are pre-paid by the consumers. It is designed primarily formedical malpractice liability insurance, but may also be applied tomalpractice liability insurance for other professions, such as dentists,lawyers, accountants or stockbrokers.

The secure virtual private network (“VPN”) that may be used to implementthe first preferred embodiment of the invention is shown schematicallyin FIG. 1. Doctors, nurses and hospital staff members may use hand helddevices such as personal digital assistants (“PDAs”) to link to remoteuser personal computers, which are linked to terminal servers (which maybe located in doctors' offices, hospitals or other locations), which arelinked to central servers, on which are maintained the data bases usedin the invention.

The initial steps in the first preferred embodiment are summarized inthe flowchart in FIG. 2. A patient (or client or other consumer) firstenters the health care (or legal or other) system seeking care (or otherservices). (Hereinafter, only the medical application will always bediscussed, but the invention may be adapted for other professions with afew obvious changes.) The consumer signs an agreement and pays a fee asa precondition to entering the system. (In the case of a minor, theconsumer or patient's parent(s) or guardian(s) may sign on his or herbehalf, and make the choices explained below for the minor.) Theagreement guarantees compensation for malpractice up to a set maximumamount, called the “policy limit”. The amount of the premium theconsumer is willing to pay determines the maximum amount of thecoverage. However, the patient is initially provided coverage only for aminimum policy limit, for a nominal fee (e.g., ten dollars) which may beconsidered as a processing charge. The doctor may even deduct thenominal fee from the doctor's fee for the initial office visit, so thatit is a “free leader” for which no extra charge is imposed on thepatient.

The agreement is electronically transferred to a data base. Theconsumer's payment is transferred to an account. Information is alsoentered into the professional's record files.

The consumer now has malpractice insurance coverage, up to the initialpolicy limit, before any services have been provided by theprofessional. The policy limit is disclosed to the consumer and agreedto by the consumer in the agreement signed by the consumer.

The following steps are summarized in the flowchart in FIG. 3. Thepatient then fills out a medical history form designed by the insurancecompany, as well as the doctor's medical hospital form. The forms maywarn the patient that if the information provided is not true andcomplete, the patient will forfeit any right to compensation formalpractice. The information provided includes the patient's age, healthand medical history, family history, occupation, life style, habits,work, play, and/or other objective or subjective criteria. (Otherinformation relevant to consumer risk factors could be provided forother professions.) This information is then electronically transferredto a data base. The patient is then given a risk rating based on theinformation, with a certain number of points given for each negativefactor (or combinations of negative factors). The patient's estimatedlifetime earnings are also calculated. The doctor then determines officeprocedure, and that is also transferred to the data base.

The office procedure is given a risk rating. Codes for medicalprocedures may be taken from the American Medical Association's CurrentProcedural Terminology (“C.P.T.” charts). Codes for diseases may betaken from the World Health Organization's International Classificationof Diseases (“ICD-9” or “ICD-10” charts). A table may be developed, suchas the Diagnosis Related Groups (“D.R.G.”—developed by the insuranceindustry), with codes for medical procedures on one axis, and codes fordiseases on the other axis. Each cell in the table would represent thecombination of one disease with one procedure, and would be assigned anumber of points based on the riskiness of the combination, with morepoints assigned to riskier combinations. Alternatively, procedures couldbe given ratings based on other objective and/or subjective criteria.(Risk ratings for services provided by other professions could bedeveloped for those other professions.)

The following steps are summarized in the flow chart in FIG. 4. Anational data base containing information on doctors is checked and thedoctor is given a risk rating. The data base includes information oneach doctor's field of expertise, malpractice or other complaints madeagainst the doctor, any physical or mental disabilities that the doctoris known to have, and/or other objective or subjective criteria. Thedoctor will be given a certain number of points for each negative factor(or combination of negative factors). (National data bases for otherprofessions could also be developed for those professions.)

The risk rating for the patient, the doctor, and the procedure are thenadded to give a total risk rating. (Alternatively, they may be combinedmathematically in other ways than simple addition.) The higher the totalrisk rating, the more costly the patient's malpractice insurancecoverage will be. The patients can choose the coverage they want,ranging from basic coverage to extreme coverage. The patient is providedwith a menu of malpractice coverage. They choose the coverage amount andpay the corresponding premium. For example, for illustration only:

Policy Limit Premium $100,000.00 $10.00 $200,000.00 $20.00 $300,000.00$30.00 $10,000,000.00 $1,000.00

A menu of insurance for lost earnings over the patient's future lifetimecould be offered separately, based on the patient's estimated lifetimeearnings.

The procedure followed when a patient enters a hospital (or other healthcare institution) is summarized in FIG. 5. If the patient enters ahospital, then the following steps are performed:

(a) The hospital's risk is rated. Factors used in determining thehospital's risk may include its size, location, the history ofcomplaints against the hospital or against doctors at the hospital formalpractice, the ratio of nurses to beds, the ratio of specialists tobeds, and/or other objective or subjective criteria. Points are givenfor each negative factor (or combination of factors).

(b) The risk of the procedure to be performed in the hospital is rated.

(c) The risk for each doctor or other individual health care providerinvolved in the procedure is rated.

(d) The patient's risk is rated.

The ratings in (a) through (d) are added together to give a total riskrating. As above, the patient is then provided with a menu ofmalpractice coverage, with premiums determined by the total risk ratingand the policy limits chosen by the patient.

Computers will be used to calculate the risk ratings and premiums. Thedata bases will be maintained on computers.

The steps taken in patient interaction with the system are summarized inFIG. 6. The patient (or a staff member acting for the patient) logs intothe system. If the patient is a new patient, background information anddata about current medical problems of the patient are collected. Thepatient is then presented with a menu of malpractice coverage. A fee iscollected, and the patient is presented with a second menu. If thepatient is not a new patient, then the second menu is presented as soonas it is determined that the patient is not a new patient. Data are thenencoded in a “smart” electronic wristband worn by the patient.

Doctor-patient interaction is summarized in FIG. 7. The doctor (or astaff member) looks up the patient's history on the computer system. Thedoctor inputs the treatment that has been given to the patient. If moretreatments are to be given, then the doctor inputs the new treatments tobe provided. If the new treatments will create new risk, the patient isthen provided with a menu of malpractice coverage, data are encoded onthe patient's wristband, the new treatments are then provided, and thepatient is released. If the new treatments will not involve anyadditional risk, then the new treatments are provided without furtherado, and the patient is released. If no new treatments are to beprovided, then the old treatments are again given, and the patient isreleased.

The risk ratings may be encoded on a wrist band worn by a patient. FIG.8 summarizes the procedure when a patient is admitted to a hospital.When a doctor first views the patient, he or she may decide to refer thepatient to a new doctor right away (who will then return to the firststep of viewing the patient). Otherwise, the doctor examines thepatient. After the examination, the doctor may decide to refer thepatient to a specialist (who will return to the first step of viewingthe patient); otherwise, the doctor will determine if a new riskevaluation of the patient is necessary. After a new risk evaluation, thepatient will be given a malpractice menu, as discussed above. Whether ornot there is a new risk evaluation, the final step is to encode the riskfactors onto a wrist band to be worn by the patient. The encoding mayutilize a smart chip embedded in the wrist band, or color coding or abar code on the wrist band.

FIG. 9 summarizes the procedure when a patient who has already beenexamined is admitted to the hospital on a “walk in” basis. If thepatient has not already provided the necessary information, the systemis logged into, information from the patient is inputted, and thepatient is given a menu. The patient then selects a level of coverage.If the patient desires extra coverage, another menu is presented.Finally, the risk factors are encoded onto a wrist band.

The second preferred embodiment is the same as the first preferredembodiment, except that what is insured against is not only malpractice,but compensation is provided to the consumer for any unfavorable outcomeof the services. The following are two possible examples of unfavorableoutcomes that are not malpractice, for illustration only:

1. An orthopedic surgeon reconstructs a limb damaged in an automobile orindustrial accident, but one of the patient's arms or legs is shorterthan the other, or there is permanent scarring or other disfiguration,through no fault of the surgeon.

2. Plastic surgery makes the appearance of a patient worse, rather thanbetter, through no fault of the plastic surgeon.

In such cases, the consumer would be compensated for the unfavorableoutcome, even though there was no malpractice. FIG. 10 summarizes thesteps taken in the second preferred embodiment of the invention. Theconsumer enters the (medical or other) service providing system. Theconsumers signs an initial agreement opting for insurance against anyunfavorable outcome (which could be presented as an alternative and/orin addition to the malpractice insurance described above) and pays anominal fee to enter the system. The cost of the services to be providedis determined. A menu of coverage options is developed. The consumer andthe service provider then sign an agreement providing for unfavorableoutcome insurance, and the consumer pays the premium. (Alternatively,the premium may be paid by the service provider or by both the consumerand the service provider.) The agreement is then electronically recordedand the record is transferred to a data base. The premium paid istransferred to an account. Relevant information is entered into theservice provider's record files.

The third preferred embodiment is the same as the first preferredembodiment, except that the premium is paid by the doctor or otherservice provider.

The fourth preferred embodiment is the same as the second preferredembodiment, except that the premium is paid by a third party.

The fifth preferred embodiment is the system of rating risks by itself,and the data bases that are created and maintained in the system, asdescribed above, used independently of the insurance system.

The sixth preferred embodiment is a method of rating hospitals for theirrisk of medical malpractice liability. The steps in the method aresummarized in FIG. 11. First, the status of various objective criteriarelated to the hospital's risk is determined. The criteria can include,but are not limited to, the following: the number of registered nursesper bed, the number of licensed practical nurses per bed, the number ofmedical specialists per bed, the number of medical subspecialists perbed, whether or not the hospital is a teaching hospital, the number ofhours worked per week by medical residents, the number of hours workedper day by staff persons, the number of pharmacists per bed, whether ornot drug dispensing is automated, the financial status of the hospital,the income-generating ability of the hospital, the credit rating of thehospital, whether or not nuclear medicine is practiced at the hospital,the socioeconomic status of the area in which the hospital is located,how easy it is for the public to get to the hospital (e.g., proximity tomajor highways or public transit), the types of insurance coverage thatthe hospital has, and the policy limits of each type, the occupational,educational and/or social backgrounds of the members of the hospital'sgoverning board, the number of physicians, interns, residents, nursesand other staff in the hospital's emergency room, the types ofinfectious diseases treated at the hospital, and the number of patientshaving each type, the number of cardiology procedures done each year,and the types of other medical procedures performed at the hospital, andthe number of each type performed in a given time period. A point valueis then assigned to each criterion. A variety of possible methods may beused to assign point value. Where there is a simple “yes” or “no” answerto whether or not a criterion is present (i.e., whether or not thehospital is a teaching hospital) a “yes” answer could be assigned avalue of 1, and a “no” answer a value of 0, multiplied by a fixed numberof points. Where the criterion has a range of possible numerical values,the range can be divided into several intervals, with the numericalvalues within each interval being given a certain fixed number ofpoints. Alternatively, the numerical value can be multiplied by aconstant, or other mathematical operations can be performed to yield thepoint value for the criterion. An overall rating for the hospital isthen determined from the point values for the criteria. The rating maybe determined by simply adding the point values. Alternatively, othermathematical operations may be performed on the point values for thecriteria to yield the rating. The rating may be used by insurancecompanies, or by the hospital for self-evaluation.

In the sixth preferred embodiment, the objective criteria are five ormore criteria selected from the group comprising (where the letters mayrepresent any constant):

the number of registered nurses per bed times A;

the number of licensed practical nurses per bed times B;

the number of medical specialists per bed times C;

the number of medical subspecialists per bed times D;

whether or not the hospital is a teaching hospital, with E pointsawarded if it is;

the mean number of hours worked per week by medical residents, times F;

the mean number of hours worked per day by staff persons, times G;

the number of pharmacists per bed times H;

whether or not drug dispensing is automated, with I points awarded if itis;

the financial status of the hospital, with negative J points for eachthousand dollars it is in debt;

the income-generating ability of the hospital, with positive K pointsfor each thousand dollars of annual profits, and negative K points foreach thousand dollars of annual losses;

whether or not nuclear medicine is practiced at the hospital, with Lpoints awarded if it is;

the socioeconomic status of the area in which the hospital is located,determined by the difference between the mean income of the populationresiding within a radius of M miles from the hospital and the nationalmean income, times N per thousand dollars of annual income;

how easy it is for the public to get to the hospital, determined by meannumber of minutes that it takes emergency vehicles to arrive at thehospital from within a given radius, after a patient has entered thevehicle and it has been cleared to proceed to the hospital, divided bythe distance in miles from the hospital, times P;

the types of insurance coverage that the hospital has, and the policylimits of each type, determined by the difference between the insurancepremiums paid by the hospital and the national mean insurance premiumspaid by hospitals with the same numbers of beds, times Q;

the occupational, educational and/or social backgrounds of the membersof the hospital's governing board, determined by the mean number ofyears of college completed times R, and by the percentage who are UnitedStates citizens times S;

the number of physicians, interns, residents, nurses and other staff inthe hospital's emergency room times T;

the number of types of infectious diseases treated at the hospital,times the number of patients having each type, times U;

the number of cardiology procedures done each year times V; and

the number of other types of other medical procedures performed at thehospital, and the number of each type performed annually, times W.

Alternatively, ten or more, fifteen or more, or all of the criteriagiven above may be selected.

The seventh preferred embodiment is a method of reducing the risks ofmalpractice or other unfavorable outcomes. The steps in the method aresummarized in FIG. 12. A patient is first examined by a doctor or otherhealth care provider. (For the sake of simplicity, all health careproviders will hereinafter be referred to as “the doctor”.) The doctorthen diagnoses any medical condition that the patient has, and assigns apredetermined code to the medical condition. The doctor may look up thecode in a manual such as ICD-9 or ICD-10 (referred to above). The manualmay be in paper form (“hard copy”) or online, and may also assist indiagnosis. The code is then entered into an automated system, and storedinformation about the medical condition that the code represents isdisplayed on a computer monitor and/or printed out.

The doctor may then prescribe one or more treatments for each diagnosedmedical condition of the patient, and assign a predetermined code to anytreatment. The doctor may look up the code in a reference such as theC.P.T. charts (referred to above). The reference may be in paper form oronline, and may also assist the doctor in determining which treatment toprescribe. Again, the code is entered into the automated system, andstored information about the treatment that the code represents isdisplayed on a computer monitor and/or printed out. If the treatmentprescribed is a drug, the doctor may then look up the drug in a manualsuch as the Physicians' Desk Reference (“PDR”), which again may be inpaper form or online, and may assist the doctor in determining what drugto prescribe. The doctor may also look up interactions between drugs ina separate data base. Once again, the code is entered into the automatedsystem, and stored information about the drug that the code representsis displayed on a computer monitor and/or printed out.

If the information regarding medical conditions, treatments and drugs isdisplayed on monitors, both the doctor and the patient should be able toview a monitor. If it is printed out, both the doctor and the patientshould have a hard copy. After reviewing the information, the patientmay be able to assist the doctor in reducing the risk of an unfavorableoutcome, by bringing facts previously known to the patient to thedoctor's attention, that the doctor may not have inquired about, andthat the patient may not have recognized as being relevant. It will alsohelp insure that the consent of the patient to any treatment is fullyinformed.

The eighth preferred embodiment is a method of rating a service providerfor risk of malpractice (or other unfavorable outcomes). The serviceprovider (hereinafter referred to as “the provider”) may be a healthcare service provider, such as a physician, dentist or veterinarian, oranother professional, such as a lawyer. The steps in the method aresummarized in FIG. 13. The provider is initially given a base line valueof X points (where X may be any constant). The status of variousobjective criteria is then determined. Point values are assigned to eachcriterion based on its status. The base line value and the point valuesare then summed to yield an overall rating for the provider.(Alternatively, other mathematical operations may be performed on thepoint values to yield the overall rating.) Negative point values areassigned to criteria having a beneficial status, and positive pointvalues are assigned to criteria having a detrimental status.(Alternatively, positive point values may be assigned to criteria havinga beneficial status, and negative point values may be assigned tocriteria having a detrimental status.) The provider may be awarded a setnumber of negative (or positive) points at the ends of specified periodsif the service provider has had no unfavorable outcomes during eachperiod.

Positive (or negative) point values may be given to criteria thatinclude, but are not limited to, the following (where the letters mayrepresent any constant): excessive consumer complaints about a serviceprovider (with a number of complaints exceeding Y being given Z points),excessive entries in a data base of detrimental information, such as thenational data base referred to above (with a service provider havingmore than AA entries being given BB points), actions taken against theprovider by a governing body, such as a licensing board (with CC pointsfor each such action), censorship of the service provider by thegoverning body (with DD points each time the service provider is socensored), malpractice judgments against the service provider (with EEpoints for each time the service provider is found liable formalpractice by a court), and settlements of malpractice claims in whichthe service provider paid damages (with KK points for each time theservice provider agreed to a settlement with damages). For the last twocriteria, positive (or negative) point values may be given in proportionto the amount of any damages awarded (in a judgment or settlement)against the provider for malpractice. Negative (or positive) pointvalues may be given to criteria that include, but are not limited to,the following: work by a specialist within his or her specialty (thepercentage of time that a specialist works within his or her specialtytime FF), work by a subspecialist within his or her subspecialty (thepercentage of time that a subspecialist works with his or hersubspecialty time GG), participation by the provider in continuingprofessional education related to his or her work (to be awarded HHpoints), commendation of the provider by a governing body (to be awardedII points), and the number of unfavorable outcomes, with the serviceprovider is awarded JJ points at the end of a year if the serviceprovider has had no unfavorable outcomes during the year.

The rating may be used by insurance companies, or by the provider forself-evaluation. If negative point values are assigned to criteriahaving a beneficial status, and positive point values are assigned tocriteria having a detrimental status, then a standard premium could bemultiplied by the rating to give the premium that the provider would becharged. If positive point values are assigned to criteria having abeneficial status, and negative point values are assigned to criteriahaving a detrimental status, then a standard premium could be divided bythe rating to give the premium that the provider would be charged.

The ninth preferred embodiment is an alternative method of providingmedical malpractice insurance, which is an adaptation and modificationof the first preferred embodiment. The first steps in the method when anew patient enters the system are illustrated in the flowchart in FIG.14. (Hereinafter, a hypothetical company that administers the systemwill be referred to as “Hygiea”.) A patient enters the Hygiea HealthCare System and is given an identification number. The patient thenfills out one or more forms (on paper or on-line) providing his (or her)health history and other information required by Hygiea. The informationis then entered into Hygiea's data base and the doctor's data base. Thepatient is then given a risk rating. Next, the patient signs an initialmalpractice insurance agreement. The patient and/or the doctor pay theinitial premium for malpractice insurance coverage. (The doctor mayinclude the premium in his (or her) billing statement, but the premiumshould be pre-paid at this time.) The signed agreement is thenelectronically transferred into Hygiea's data base. The initial premiumpayment is electronically transferred to Hygiea's account. Andinformation about the agreement and the premium payment issimultaneously entered into the doctor's data base.

The next steps are shown in FIG. 15. The patient is given a menu ofmalpractice insurance coverage, ranging from a required minimum coverageat a minimum cost to maximum coverage at a maximum cost. The patient isthen given a menu of optional lifetime earning coverage (that willcompensate them for lost earnings due to medical malpractice or otherunfavorable outcomes) with a range between zero coverage at no cost tomaximum coverage at a maximum cost. The patient makes his choices fromthe menus, selects a payment mode, and a final agreement is printed out.When the final agreement is signed by the patient, it is entered intothe Hygiea data base and payments are transferred into the Hygieaaccount. Simultaneously, a smart wrist band is printed out (containingthe information provided earlier) and placed on the patient.

FIG. 16 shows further steps in the process. The doctor communicates withthe patient, either face to face in a traditional office visit, orelectronically or by other means. The doctor determines medicalprocedures to be performed. Information on the procedures is enteredinto a data base. Each procedure is given a risk rating.

FIG. 17 shows the concluding steps in the process for a new patient.First, the systems checks to make sure that the steps shown in FIGS. 14and 15 have been completed. Then a risk rating is calculated, and a menuof malpractice coverage is provided to the patient and the doctor. Notethat this is additional coverage for the specific procedure, and is inaddition to the coverage mentioned above.

FIG. 18 illustrates the initial steps taken when an old or formerpatient reenters the system. The former patient may have been out of theHygiea Health Care System for some time (and perhaps has gone toout-of-system providers). The patient's medical history and otherinformation is updated and entered into the system. The patient is thengiven an updated risk rating. Hygiea's system then evaluates coverage inrelation to risk and determines the cost of ranges of coverage based onthe updated risk rating. The system prints out (or displays on aterminal) for the patient and doctor a menu of malpractice options andcoverage. The doctor may also evaluate coverage in relation to risk andmake a recommendation to the patient (perhaps to obtain more coverage).

FIG. 19 illustrates the concluding steps to be taken when an old patienthas reentered the system. The system prints out (or displays on aterminal) a menu of lifetime earning coverage options for the patientand doctor to review. The patient and/or doctor select coverage. Apolicy is then printed, signed and paid for. A smart wrist band isprinted out and placed on the patient. Treatment is then rendered.

The tenth preferred embodiment is a method of drug cost analysis. FIG.20 shown the initial steps in the method. The consumer's zip code isentered by the consumer or his health care provider. The zip code isused to determine the location of the consumer and nearby pharmacies.The local area is broken down by the zip codes of consumers andpharmacies. The consumer may be considered to be the bull's eye of atarget, with concentric rings at fixed distances from the consumerdemarcating zones within which pharmacies may be found. The price that aconsumer is willing to pay for pharmaceuticals is assumed to beinversely related the distance of the pharmacies. A consumer may bewilling to drive one mile to save a dollar, but may be willing to drivetwenty miles to save one hundred dollars. Hygiea may provide a websiteto help consumers make cost comparisons.

FIG. 21 illustrates further steps in the method. Hygiea determines thecost of filling prescriptions at each pharmacy in a defined area, so asto make “apple to apple” comparisons. Prices and locations are eachrated on a numbered scale (e.g., 1 to 10). If a reasonable price cannotbe found within an inner ring, Hygiea will analyze the next ring furtherout.

FIG. 22 illustrates concluding steps in the method. A computer survey ofthe cost of prescriptions under Medicare, Medicaid, Access, and otherpublic or private health care plans is made at each pharmacy in relatedzip codes. Hygiea's staff perform a survey by telephone of pharmacies inthe area. If necessary, the staff will go to the pharmacies to haveprescriptions filled. They will track the increase in price through thedrug supply chain from manufacturer to wholesaler to pharmacy toconsumer. They will compare the costs to consumers of drugs from varioussuppliers, including pharmaceutical benefit management companies(“PBMs”) and health maintenance organizations (“HMOs”).

The eleventh preferred embodiment is a method of providing health careinsurance to consumers on an individual basis as opposed to a groupbasis. The method uses objective criteria as well as actuarialinformation to determine the cost of a range of health insurancepolicies. A menu of choices, ranging from a simple to an extreme policy,with the cost of each, is provided to the individual. This enables theindividual to pro-actively determine the type and cost of their healthcare insurance. The objective criteria include, but are not limited to,the individual consumer's age, occupation, weight, present and pastmedical history and health habits, codes for diseases suffered by theindividual consumer (such as ICD-9 or ICD-10), and codes for proceduresperformed on the individual consumer (such as CPT). The premium for thepolicy is paid for by a medical or health savings account, an employer,the government (e.g., through Medicare, Medicaid or Access), or byanother third party. But the individual would always be the beneficiaryof the policy. The individual may use the services of a health careprovider in making a selection from the menu, but is not required to doso. In addition to the policy selected from the menu, an additionalcatastrophic coverage plan is provided, which is paid for by the sameparty. The catastrophic coverage plan is a nominal cost plan (e.g.,having a premium under fifty dollars) provided to all consumers and usedfor defined catastrophic needs only.

The eleventh preferred embodiment allows individuals, businesses and thegovernment to pro-actively determine the cost of health insurancecoverage on an individual as opposed to a group basis. The method cannotbe used on a discriminatory basis, but can be used to isolate the smallpercentage of the population that uses the majority of health careresources, so that the government can design a system to care for thissmall percentage at a more reasonable and controlled cost. (As in thecase of flood insurance, government will fill a need that cannot be metby private entities.)

The twelfth preferred embodiment is an automated system for setting upand using health savings accounts (“HSA”). It includes the followingsteps, as illustrated in FIG. 23: When a patient or consumer meets ahealthcare provider, his or her information is entered into a computersystem. The provider uses the computer system to determine treatmentneeded based on diagnosis. The cost of the treatment is calculated bythe system. The consumer is given the option of opening an HSA to payfor the treatment. Appropriate information and material is printed out(or otherwise outputted) by the system. The system may alert theconsumer's accountant or other financial advisor. If the consumer agreesto open an HSA, his or her Social Security and/or tax ID number isentered into the system. Account information is verified by the systemfrom data provided by the consumer and/or the consumer's accountant orother financial advisor. The consumer's income information is enteredinto the system, and taxes owed are calculated. The system prints (orotherwise outputs) any necessary forms, which are signed by the consumerand entered into his or her health record file. The consumer chooses afinancial institution at which to open the HSA. The system connects withthe chosen institution, and exchanges information with the institution.The consumer again signs forms provided by the system, and makes acontribution to the HSA through the system. The system verifies thestatus of the HSA, and provides documents to transfer payment for thetreatment from the HSA directly to the provider, or indirectly from theconsumer to the provider. The system provides the consumer withconfirmation and tax forms (with filing information to consumer and/orconsumer's accountant or other financial advisor) and inputs informationinto consumer's health record file.

It is to be understood that the present invention is not limited to thepreferred embodiments described above, but encompasses any and allembodiments within the scope of the following claims.

1. A method for setting up and using health savings accounts, comprisingthe steps of: meeting a consumer by a healthcare provider; enteringinformation about the consumer into a computer; diagnosing healthproblems of the consumer using the computer; determining treatmentneeded for the consumer by the healthcare provider using the computerand its diagnosis; calculating the cost of the treatment using thecomputer; offering the consumer the option of opening a health savingaccount to pay for the treatment; outputting information and materialusing the computer; entering the consumer's identification number intothe computer, if the consumer agrees to open a health saving account,else ending the process; verifying the consumer's account information;entering the consumer's income information into the computer;calculating taxes owed using the computer; outputting health savingsaccount enrollment forms; inputting consumer's signature of the healthsavings account enrollment forms; saving the health savings accountenrollment forms to a health record file for the consumer; choosing afinancial institution by the consumer at which to open the healthsavings account; connecting with the chosen institution, and exchanginginformation with the institution, using the computer; outputtingfinancial institution forms by the computer; inputting consumer'ssignature of the financial institution forms; processing consumer'scontributions to the health savings account using the computer;verifying the status of the health savings account, using the computer;providing documents to transfer payment for the treatment from thehealth saving account using the computer; providing the consumer withconfirmation and tax forms using the computer; inputting informationregarding payments and taxes into consumer's health record file in thecomputer; inputting into a computer a medical code for each particularservice included in the treatment; calculating the risk for theparticular service indicated by each of the medical codes, using thecomputer; producing, based on the risk and using the computer, a menu ofpolicy limits and corresponding premiums for an insurance policy to bepurchased by a patient prior to the particular services being provided,including a minimum policy limit and a corresponding minimum premium;displaying the menu; receiving and inputting into the computer aselection from the patient of one of the policy limits and itscorresponding premium; receiving and inputting into the computer paymentfrom the patient of the premium corresponding to the policy limit chosenthe patient; receiving from the patient and inputting into the computeran indication of agreement that the liability of a health care providerfor malpractice will not exceed the policy limit; determining if abreach of a duty of care has been committed by the health care provider;and if and only if a breach of a duty of care has been committed by thehealth care provider, compensating the patient through a computerizedsystem only for the malpractice up to the amount of the policy limit; orelse if there has been no breach of a duty of care by the health careprovider, not compensating the patient.
 2. The method for setting up andusing health savings accounts according to claim 1, including theadditional step of: alerting a financial advisor of the consumer thatthe consumer has been offered the option of opening a health savingaccount to pay for the treatment.
 3. The method for setting up and usinghealth savings accounts according to claim 1, wherein payments for thetreatment are transferred from the health saving account directly to theprovider.
 4. The method for setting up and using health savings accountsaccording to claim 1, wherein payments for the treatment are transferredfrom the health saving account indirectly to the provider from theconsumer.
 5. The method for setting up and using health savings accountsaccording to claim 1, including the additional step of: providing taxfiling information to the consumer using the computer.
 6. The method forsetting up and using health savings accounts according to claim 1,including the additional step of: providing tax filing information tothe consumer's accountant using the computer.
 7. The method for settingup and using health savings accounts according to claim 1, including theadditional step of: providing tax filing information to the consumer'sfinancial advisor using the computer.
 8. A method for setting up andusing health savings accounts, comprising the steps of: meeting aconsumer by a healthcare provider; entering information about theconsumer into a computer; diagnosing health problems of the consumerusing the computer; determining treatment needed for the consumer by thehealthcare provider using the computer and its diagnosis; calculatingthe cost of the treatment using the computer; offering the consumer theoption of opening a health saving account to pay for the treatment;outputting information and material using the computer; entering theconsumer's identification number into the computer, if the consumeragrees to open a health saving account, else ending the process;verifying the consumer's account information; entering the consumer'sincome information into the computer; calculating taxes owed using thecomputer; outputting health savings account enrollment forms; inputtingconsumer's signature of the health savings account enrollment forms;saving the health savings account enrollment forms to a health recordfile for the consumer; choosing a financial institution by the consumerat which to open the health savings account; connecting with the choseninstitution, and exchanging information with the institution, using thecomputer; outputting financial institution forms by the computer;inputting consumer's signature of the financial institution forms;processing consumer's contributions to the health savings account usingthe computer; verifying the status of the health savings account, usingthe computer; providing documents to transfer payment for the treatmentfrom the health saving account using the computer; providing theconsumer with confirmation and tax forms using the computer; inputtinginformation regarding payments and taxes into consumer's health recordfile in the computer; inputting into a computer a medical code for eachparticular service included in the treatment; calculating the risk forthe particular service indicated by each of the medical codes, using thecomputer; producing, based on the risk and using the computer, a menu ofpolicy limits and corresponding premiums for an insurance policy to bepurchased by a patient prior to the particular services being provided,including a minimum policy limit and a corresponding minimum premium;displaying the menu; receiving and inputting into the computer aselection from the patient of one of the policy limits and itscorresponding premium; receiving and inputting into the computer paymentfrom the patient of the premium corresponding to the policy limit chosenthe patient; receiving from the patient and inputting into the computeran indication of agreement that the liability of a health care providerfor malpractice will not exceed the policy limit; determining if therehas been an unfavorable outcome resulting from the treatment; and if andonly if there has been an unfavorable outcome resulting from thetreatment, compensating the patient through a computerized system forthe unfavorable outcome up to the amount of the policy limit; or else,if there has been no unfavorable outcome resulting from the treatment,not compensating the patient.
 9. The method for setting up and usinghealth savings accounts according to claim 8, including the additionalstep of: alerting a financial advisor of the consumer that the consumerhas been offered the option of opening a health saving account to payfor the treatment.
 10. The method for setting up and using healthsavings accounts according to claim 8, wherein payments for thetreatment are transferred from the health saving account directly to theprovider.
 11. The method for setting up and using health savingsaccounts according to claim 8, wherein payments for the treatment aretransferred from the health saving account indirectly to the providerfrom the consumer.
 12. The method for setting up and using healthsavings accounts according to claim 8, including the additional step of:providing tax filing information to the consumer using the computer. 13.The method for setting up and using health savings accounts according toclaim 8, including the additional step of: providing tax filinginformation to the consumer's accountant using the computer.
 14. Themethod for setting up and using health savings accounts according toclaim 8, including the additional step of: providing tax filinginformation to the consumer's financial advisor using the computer.